US media veteran warns of price hikes for sports subscribers
By Jonathan Rest at Hashtag Sports in New York
Sports fans will be forced to pay more to watch their content because of the changing media landscape, one of USA’s most experienced media executives has warned.
Tom Rogers, the former president and chief executive of digital video recorder company Tivo, and founder of the CNBC news channel and MSNBC cable channel, said cord-cutting and the emergence of the likes of Amazon, Facebook and Google as sports rights acquirers will expose sport's “dirty little secret.”
He told the Hashtag Sports conference in New York yesterday: “When you look at the entire cable and satellite bundle today, 70 per cent of programming costs are caught up in sports. The dirty little secret is that sports TV has largely been supported by non-sports viewers. Everyone that gets the cable bundle regardless of whether they are sports viewers is paying for ESPN or whatever. There is a massive element tied up in cable costs that is being subsidised by non-sports viewers.
“The attack from Amazon and others goes to the question of how that will break down. Sports viewers will have to cover that cost. Will that sustain?”
While linear TV networks still hold the bulk of rights to the North American major leagues, these long-term multi-billion contracts will expire within the next five to seven years, and the digital players are circling.
Twitter and now Amazon have both shown Thursday night NFL games, while in March Major League Baseball struck its first digital-only national broadcast deal with Facebook, with 25 afternoon games in the 2018 season streamed exclusively on Facebook Watch, its live video platform in USA.
Out of market NHL ice hockey and MLB games have also been streamed on Twitter.
Rogers, now executive chairman of Winview, a mobile app that enables users to make in-game predictions, continued: “The health of the sports industry is intimately tied to the health of the TV industry. And the TV industry is going through systemic changes and hitting the sports industry head-on. No-one here needs reminding that ESPN has lost 15 million subscribers over the last few years, that sports ratings are down significantly, that traditional linear viewing experience is under attack.
“When it comes to live TV, it is really down to sports now. Sport is the anchor.
“Soon these behemoth contracts that have underpinned the economics of the sports industry are going to be thrown up in the air. How quickly cord-cutting happens or how quickly skinny bundles that don’t have sport in them are adopted are going to fundamentally effect everything we see in the sports industry.”